Manufacturing Industry Real Wages Rises 10 times During the Last 33 Years

It has shown that over the last 33 years, the manufacturing workers’ salary has increased by 138-fold and monthly working hours have decreased 26 hours.

Also, since 2001, the rising-wage rate has exceeded the labor productivity growth rate for three consecutive years, and as a result, competitive industry is falling.

The Bank of Korea announced yesterday with the report ‘The Tendencies and Main Features of the Manufacturing workers’ wages and work hours’ that in a manufacturing industry with 10 or more employees, the common worker had a monthly pay of 14,301 won in 1970, but during the first half of 2003 (January-June), it was reported 1,980,255 won, increasing by 138-fold.

During the same period or time, the nominal wage by the hour rose by 155 times from 62won to 9600won, but on the other side, the average monthly working hours dropped by 26 hours, from 232 hours a month to 206 hours, resulting from the law to reduce on working hours.

Considering the rate of price increase, the real wage increased 7.7% yearly, rising 10 times than in 1970.

It appeared that the real wage increase rate has passed the labor productivity growth rate since 2001. Manufacturing labor productivity has risen from a 8% rate in 1971~1990 to a 11.9% rate in 1991~2000 but during 2001~2002, has dropped to a 6.1% and has slowed down to 3% during the first quarter of 2003.

Joong-Hyun Park sanjuck@donga.com